Between 1938 and mid-1940, the Nazi administration in Austria focused on stimulating the economy and relieving social distress in order to win popular support, woo the working class away from socialism, and enable Austria to contribute to the German war machine. By early 1939, the Austrian economy was recovering, and unemployment was falling rapidly.

Policies designed to speed economic efficiency and integration with Germany led to the rise of large firms and to the relocation of industry from the east to the Austria-Germany border in the west. Although these changes brought much of the Austrian economy under the control of the Third Reich, the economy was modernized and diversified. Thus, in spite of the wartime damage done to the Austrian economy and economic infrastructure, the Anschluss years helped overcome the belief that Austria was economically inviable and laid the foundation for the mixed economy of the postwar years.

These economic advances, however, came hand-in-hand with the Nazis' political repression and barbaric racial policies, of which the Jews were the principal victims. Unification with Nazi Germany legitimized the full venting of Austria's anti-Semitic political heritage in which the pronounced Jewish presence in key areas of economic, political, and cultural life--especially in Vienna--had associated Jews with many developments in Austrian society that were opposed by the country's conservative, rural, and Catholic population.

The Jewish population of Austria--almost all of whom lived in Vienna--numbered around 220,000 in 1938. In general, Nazi antiSemitic legislation and policies were imposed more quickly and more comprehensively in Austria than in Germany, and Austria became the testing ground for the political acceptability of policies later adopted in Germany. After allowing a wave of violent popular anti-Semitism in the weeks immediately after the Anschluss, the Nazis systematized anti-Semitic harassment. Laws and regulations were implemented to drive Jews from the economic sector, and out of Austria in general, in an orderly manner to ensure that the transition did not disrupt the economy or cause the loss of economically valuable assets. Initially, Jews were encouraged to emigrate--after they had been stripped of money and assets--and the Central Office for Jewish Emigration (Zentralamt jüdischer Auswanderung--ZjA) was set up in Vienna to streamline the emigration process. In 1938 about 80,000 Jews left Austria, legally and illegally, and ultimately some 150,000 fled. In October 1941, however, Germany's policy of encouraging emigration, already made difficult by the war, was replaced with policies to exterminate the Jews. The ZjA, which had been expanded to the occupied countries, organized the registration and transportation of Jews to death camps to implement the socalled Final Solution. About one-third of Austria's Jewish population is estimated to have died in the Holocaust. In addition to the Jews, there were other victims of murderous German nationalism. Austrian Slavic minorities, such as the Czechs, Slovaks, Slovenes, and Croats, for example, were targeted for assimilation, deportation, or extermination.

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Source: U.S. Library of Congress